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Suppose you borrow $200500 when financing a coffee shop which is valued at $275000. You expect to generate a cash flow of $550000 at the

Suppose you borrow $200500 when financing a coffee shop which is valued at $275000. You expect to generate a cash flow of $550000 at the end of the year. The cost of debt is 8%.

a) What is the cost of equity?

b) What should the value of the equity be?

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